ND’s tax relief package generates mixed reaction

BISMARCK – North Dakota lawmakers delivered more than $1 billion in tax relief, but a backer of last year’s Measure 2 says the Legislature failed to provide adequate relief or reform.

Charlene Nelson, chairwoman of Empower the Taxpayer, the nonprofit coalition that pushed Measure 2 onto the 2012 ballot, said the Legislature only “set the clock back,” arguing that it’s temporary relief and only a matter of time until it’s gone.

She also said there was no tax reform, which was the large focus of Measure 2, a citizen-initiated measure to abolish property taxes. The measure failed in a statewide vote but helped focus attention on the issue of taxes in a state raking in money from oil taxes and a booming economy.

Nelson said property tax reductions won’t make enough of a dent as property values rise. She expects another effort similar to Measure 2.

“Once people get their bills next fall and see their taxes increase, there will be a measure,” she said. “This will be an issue because the Legislature did nothing and in many ways made it much worse.”

Nelson said she already has received more than 20 phone calls from residents who voted against Measure 2 who told her they realized they should have voted for the proposal.

By the time they wrapped up early Saturday, lawmakers had passed $850 million worth of property tax relief, with $656 million through a new K-12 school funding formula and $200 million through a state-paid tax credit. On Tuesday, Gov. Jack Dalrymple signed a bill worth $250 million in income tax relief.

Deputy Tax Commissioner Ryan Rauschenberger said the tax relief package “is going to be a well-received, significant reduction in overall property taxes across the state,” building on the relief that was passed in 2009.

In 2009, the state passed a 75-mill buydown of school district property taxes.

Using the state average of 387 mills in a school district that received the 75-mill levy buydown, a $180,000 home property tax bill would be $3,135. When the relief passed this year through school districts kicks in, plus the 12 percent across-the board cut, that bill would be reduced to $1,868 – a cut of $1,267, Rauschenberger said.

He said the new formula to distribute state funding for tax relief is more transparent for taxpayers.

When local political subdivisions calculate their property tax assessments, a 12 percent across-the-board cut will be applied to each final property tax statement. The county will then be reimbursed that 12 percent from the state Tax Department and distribute it back to each political subdivision.

On their next property tax statement, taxpayers will see a dollar amount that indicates how much the state paid the county for property taxes.

The auditor for the state’s most populated county said Tuesday that the 2013 legislative session was good for taxpayers.

“While not all of them will be happy, I think most of them will think it’s a good break and appreciate it,” said Cass County Auditor Mike Montplaisir. “I think the tax relief they passed is responsible, taking into consideration the needs of both the state, local government and taxpayer.”